Overstock shares fade as CEO warns of 'drugs or dead body' caper
Mark Cuban now part of the fun
Overstock.com CEO Patrick Byrne continues to break new ground as the head of a publicly traded company. In a single TV interview last week, he shocked investors by revealing that holiday sales were far below expectations, perplexed the financial crowd by talking about drugs and dead bodies being found in his trunk and initiated a verbal war with billionaire blogger Mark Cuban. This latest round of gaffes adds to a tradition for Byrne that includes admitting that he lied about being gay and a coke-head to financial analysts and initiating a program to uncover a "Sith Lord" seeking to ruin Overstock.
You can't make this stuff up.
On Dec. 23, Byrne appeared on Bloomberg TV and turned in a performance for the ages. First off, he declared that Overstock's sales "have been, to be honest, a tad disappointing." Byrne tried to put a good spin on this statement saying that Overstock is accustomed to growing 3 to 4 times faster than the online retail market and that it would only outgrow the market by 2x this year.
"Twice as fast is good enough for some people, but I'm a little disappointed."
Most CEOs would use a press release to reveal a major sales miss. In so doing, they can control the language and tone of their message. Not Byrne. He kept spouting off about Overstock's sales, causing a panic. Shares of Overstock plummeted from around $33 to $28.80, at the time of this report, as investors caught wind of the drop in sales. Clearly, they were more than a little disappointed.
Overstock was forced to issue a press release on Dec. 27 to explain Byrne's remarks.
"We've had a nice holiday season, just not as nice a season as we've had in the past or as I'd hoped for," Byrne said in the statement. "To get above the noise, we spent a few dollars more than we had hoped, but in my experience, over time, those dollars will pay large dividends. So I decided to do what is smart for the company in the long run, rather than focus on just the quarter's results - because I plan to be around next season as well, and to be bigger than ever."
Overstock has been disappointing investors and customers with a number of technology meltdowns that have included the inability to track orders, a customer service system that hangs up on consumers and most recently periodic web site outages. These flaws have turned Overstock into a laughingstock on numerous customer service boards, and the company's customer service ratings have fallen on the American Customer Satisfaction Index (ACSI), which Overstock cites as the only real metric for measuring its customer service quality.